“The General Public”

Don’t be ridiculous. Get out. How can it not be about us? The United States Department of Justice is raining terror down on our lunch menus and…wait, who did you say? The General Public? Who is “The General Public?” Who? Readers? OH, of course, the readers. Our readers! Our gorgeous and/or handsome readers, as the case may be. Good God, salt of the Earth! What? Wash your mouth out, we do not consider our relationships with distributors or retailers to be more valuable than our relationships with our readers. That was some other traditional publishing industry you’re thinking about. Maybe Russia. Not here, nyet. We are working every day in every way to get closer and closer to our readers, so close that we can scan the numbers on their credit cards and store them up along with that three- or four-digit code off the front of the card and the Holy Expiration Date, store ’em up, right here in our bright shiny whatever it is, The Thing That Stores the Data, there’s a more technical term but you’ll have to ask our cloud-banked 12-year-olds in IT about that…sorry, whose letter to the DoJ? About our lawsuit? Consumer representatives wrote to the DoJ? Representing who? The General Public? And that would be….? Readers? OH, readers. We love our readers…

How will we survive a year of this? Half the industry seems to be attacking the other half continually: a black-belt Cato springing from behind every slush pile onto the nearest Clouseau. “Amazonnnnnnnn!!!” Big crash into the furniture. It was funnier in the films.

The date next June is for the trial of Apple, Penguin, and Macmillan, the three companies that have declined to settle with the DoJ.

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Meanwhile, as you know, the public comment period has been running on the proposed DoJ settlement with three other publishers accused of collusion and price-fixing: Hachette, HarperCollins, and Simon & Schuster.

And yet, how much do you feel you’ve heard from the public about the price-fixing and collusion allegations? The public.

You remember the public, don’t you? People with other things on their minds than the state of publishing. People running other kinds of races, and not obsessed with digital distribution or DRM. Another kind of agile. People to whom ebooks and print books are just…ebooks and print books.

Of course, many people and groups in the industry have written to the DoJ, as well. Some have published their statements. Eventually, the DoJ is to release all those documents. And we’re going to get into a couple of new comments from inside the industry about the settlement a bit later in the Ether, as a matter of fact.

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But first, I’d like to call to your attention to the statement from the Consumer Federation. You may be familiar with this outfit. It’s been in the news lately, for example, with a 15-city study, reported in the Times by Ann Carrns: Consumer Group Questions ‘High’ Auto Insurance Rates.

The federation describes itself as “an association of non-profit consumer organizations (nearly 300 of them) established in 1968 to advance the consumer interest through research, advocacy, and education.”

I have no association with the federation, I know no one who works with it. Nor am I saying to you that the position the federation takes on the DoJ settlement is correct or is more nearly correct than that taken by anyone else.

Time and again, what you hear our folks saying inside the publishing industry is that the DoJ — the whole world, in fact — just doesn’t understand publishing. Doesn’t know what it takes to run this business. Doesn’t get it. Nobody knows the trouble we’ve seen.

Mark Cooper, Consumer Federation of America

Here is Mark Cooper writing for the federation. His use of the phrase “celebrity authors” refers to the Authors Guild and its June 4 piece, The Justice Department’s E-Book Proposal Needlessly Imperils Bookstores; How to Weigh In:

The self-interested claims of brick-and-mortar retailers and celebrity authors who profit from price fixing at the expense of consumers must not mislead the court into thinking that
(1) the public interest lies in anything short of restoring full price competition to the book publishing marketplace or
(2) that the harm to competition inflicted by the agency cartel price-fixing for digital distribution of books at a critical moment in the nascent development of new digital business models can be repaired without a significant period of close oversight and scrutiny.

Some inside the industry argue that the settlement’s restriction of agency agreements for two years is a burden.

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By contrast, the federation argues:

The two-year period in which the consent decree restricts the use of agency agreements by the cartel members in an effort to allow competitive, commercial relations to return to the book publishing market is dangerously short and a break with past antitrust practice. If any modification of the consent decree is needed, based on the record and past practice, it should be to lengthen the period in which behavior of the members of the cartel is restricted, not shorten it.

There’s also an interesting view of the plight of brick-and-mortar bookstores, free of the sentiment and loyalty-to-tradition that many in our industry hold fast:

Unfortunately for the bookstores, the readers who need the functions of the specialty bookstores don’t value them enough to pay for the services they provide. Since the specialty bookstores cannot compete on price or service, cartel agency pricing is the only solution, a solution in which consumers are forced to pay a higher price, but get services that they are unwilling to pay for. Colluding publishers, not the marketplace decide what is good for consumers.

Such statements are as radicalized in tone and expression here as any that come from inside the industry.

But if we gathered a group of citizens who had no ties whatever to the industry — our readers — and asked them whose claims and interpretations of the situation sounded right? They may well side with the association complaining that agency pricing allowed publishers to set and hold ebook prices higher than the largest retailer wanted. A baseline premise here is that an awful lot of ebooks may have cost less if the publishers hadn’t handled things as they did.

In sum, as the federation’s document has it, the agency pricing arrangement at the center of the DoJ case is:

…a vain attempt to preserve an inefficient distribution system and protect the interests of the incumbent physical space distributors at the expense of the public interest.

And even if you reject that view — even if you believe your industry understanding gives the lie to every syllable of it — it may help to realize that this could well be how the world outside the publishing community, including many readers, sees this.

Now, let’s get back into the industry, and hear from stakeholders again.